DVVNL Data Gap-1

275 Pages·2016·36.78 MB·English

Deficiency Note on DVVNL's Petition for Truing-up of FY 2013-14 and ARR/Tarifff or FY 2016-17
January 29, 2016
DakshinanchalVidyutVitaran Nigam Limited (DVVNL) Truing -Up of FY 2013-14 and Annual Revenue
Requirement for FY 2016-17
Preliminary Information Requirement/Discrepancies in the Petition
1) Petitioner should submit the replies in soft copy and hard copy. (5 Nos.)
2) All the letters/correspondence/ annexures should be submitted in scanned PDF copies.
3) In case any submission has already been made to the Commission earlier, the same should
be re-submitted to make it part of the present proceedings.
A. General
1. Tariff Formats for (i) True Up of FY 2013-14 & (ii) ARR/ Tariff for FY 2016-17
a. It has been observed that there are certain forms specified in the Distribution Tariff Regulations,
2006 which the Petitioner has not submitted. Further, some of the formats submitted by the
Petitioner along with the Petition are either not filled completely or some of the cells are left
unfilled with only totals entered in the respective cells. The Petitioner should provide the details
as prescribed in the formats in line with the Distribution Tariff Regulations, 2006. The missing or
incomplete Forms are listed below:
True up of FY 2013-14 and ARR/Tariff for FY 2016-17
~qJ;f!I_No. Par:tkuJa1.s
52 Balance Sheet
53 Cash flow statement
58 Energy Balance
510 Accounting Ratios
Fl Revenue from Tariff and Charges \I
F4 Summary of Own Generation & Power Purchase
F4a Monthly Power Purchase Details
F6 Employee Strength \I
F6b Retirement Pattern \I
F8 Statement of Fixed Assets and Depreciation
F9a Domestic loans, bonds and financial leasing
F16 Project-wise I Scheme-wise Capital Expenditure
F19 Current Assets and Liabilities
Tl Existing & Proposed Tariff \I
T2 Revenue from Current Tariffs in Ensuing Year \I
Deficiency Note on DVVNL's Petition for Truing-up of FY 2013-14 and ARR/Tariff for FY 2016-17
Form No. Particulars
T3 Revenues at Proposed Tariffs for the Ensuing Year \I
Pl Age wise Analysis of Revenue Arrears \I
Pla Age wise Analysis of Revenue Arrears of Government
P2 T&D Losses in LT and HT Systems \I
P2a Losses in 33 KV system
P2b Losses in 11 KV system
P2c Losses in LT system
P3 Consumer Complaint \I
P4 Voltage Profile \I
PS Transformer and Line Length Details \I
P6 Abstract of outages due to tripping in HT feeders \I
P7 Failure of Transformers \I
P8 Billing Periodicity \I
pg Electrical Accidents
\I
PlO Peak Demand \I
Pll Management and operation related ratios \I
P12 Debt Restructuring \I
P13 Release of New Service Connection \I
P14 Status of Metering \I
Licensee's Response:
The Petitioner humbly submits that out of the list, the ticket forms are provided in soft copy in compact
disk attached herewith. For the remaining forms petitioner seeks some more time.
b. Petitioner should submit the complete filled in formats from FY 2013-14 till FY 2016-17.
Licensee's Response:
The Petitioner seeks some more time to respond to this query.
Deficiency Note on DVVNL's Petition for Truing-up of FY 2013-14 and ARR/Tarifff or FY 2016-17
B. Truing-up for FY 2013-14
2. UPPCL CAG Report
The Petitioner should submit the Audited accounts of UPPCL for FY 2013-14 along with the
supplementary audit report of CAG to make it the part of current proceedings. Petitioner should
also submit the provisional accounts of UPPCL for FY 2014-15.
Licensee's Response:
The audited accounts for FY 2013-14 of UPPCL along with the supplementary audit report of CAG and
provisional accounts for FY 2014-15 are hereby annexed marked as "Annexure-1".
3. Power Purchase
a. With regard to the power purchase cost the Petitioner has submitted that, it has calculated the
allowable power purchase input at Discom end by grossing up the actual energy sales by the
approved Distribution loss target or actual Distribution losses, whichever is lower and
thereafter, the allowable power purchase input has been multiplied by the Trued-up Bulk Supply
Rate to derive the allowable power purchase cost for FY 2013-14. However, in Table 2-2of the
Petition the actual energy received at Discern end is mentioned to be 77,586.12 MUs whereas
the Petitioner has considered 79,820.83 MUs for grossing up with approved transmission loss of
5.26% to reach at actual power purchase level of 84,251.84 MUs. In this regard, the Petitioner
should submit the revised power purchase cost based on the approach adopted by the
Commission in the last Tariff Order and as stated by the Petitioner in its approach for claiming
power purchase cost for FY 2013-14.
Licensee's Response
The Petitioner humbly submits that the revised power purchase cost and calculation of revised bulk
supply tariff based on the approach adopted by the Commission in the last Tariff Order dated 181h
June, 2015. Further the Petitioner humbly submits that there is substantial rise in actual
transmission loss level for FY 2013-14is due to increase in Inter-State transmission losses. The actual
Inter-State transmission losses approved for FY 2013-14 were 1.65% against which the actual inter
state transmission losses for FY 2013-14 is 3.67%.
In this regard Petitioner further requests the Hon'ble Commission to kindly approve the additional
power purchase quantum due to increase in Inter-State transmission losses, as the same is beyond
the control of the Petitioner, while approving the revised Bulk Supply Tariff. Accordingly the
Petitioner has worked out the revised Bulk Supply Tariff for the purpose of truing-up for FY 2013-14
as depicted in the table below.
Deficiency Note on DVVNL's Petition for Truing-up of FY 2013-14 and ARR/Tariff for FY 2016-17
I True-up
Particulars Unit Approved Actuals
Petition
Power Purchase MU 84,632.00 84,251.84 83,871.72
Inter-State Transmission Losses MU 1,397.00 3,344.80 3,329.71
Inter-State Transmission Losses % 1.65% 3.97% 3.97%
Intra-State Transmission Losses MU 3,054.00 3,320.92 80,542.01
Intra-State Transmission Losses % 3.67% 4.10% 3.67%
Energy available at Discern End MU 80,181.00 77,586.12 77,586.12
Power Purchase Cost (including PGCIL charges) Rs Crore 31,456.00 33,233.64 33,083.70
Power Purchase Cost per unit Rs/kWh 3.72 3.94 3.94
O&M Expenses of UPPCL Rs Crore 157.71
Allowable Power Purchase Cost at Discern end Rs Crore 33,241.40
Power Purchase Cost per unit at Discern end (BST) Rs/kWh 4.284
Further in line with the approach adopted by the Commission in the last Tariff Order dated 13th
June, 2015, the Petitioner has also included the O&M expenses incurred by UPPCL for procuring the
power for the Discerns. Accordingly such O&M expense for the purpose of Truing up has been
considered as a part of Bulk Supply Tariff.
b. The Commission in its Tariff Order dated June 18, 2015 had given the following direction.
"Thus, in order to have greater clarity the Commission directs the Licensees that, from FY
2013-14 onwards it should clearly depict the total power purchase cost incurred at UPPCL
level based on actual power purchase cost, total power purchase cost billed by the UPPCL
to the Distribution Licensees and power cost payable to UPPCL in its true-up petitions for
future years."
Accordingly the Petitioner should submit the above mentioned details as directed by the
Commission for FY 2013-14.
Licensee's Response
The Petitioner humbly submits the required data in the following tables
Amount
Particulars
(~s. Crore)
Power Purchase Cost 31,956.62
PGCIL Charges 1,277.02
Total Power Purchase Cost incurred at UPPCL level 33,233.64
Particulars AmotJnt (Rs. Crore)
DVVNL 7,980.02
MVVNL 6,693.04
Deficiency Note on DVVNL's Petition for Truing-up of FY 2013-14 and ARR/Tarifff or FY 2016-17
ParticuJ~rs Amouot,~Rs. Crq,;e)
PVVNL 11,374.21
PuVVNL 7,966.35
KESCO 1,663.59
Total Power purchase cost billed by the UPPCL to the
35,677.21
Distribution Licensees
Minimum of
Trued-up Power Purchase
Target and Allowable
Bulk Supply Payable to UPPCL
Particulars Sales (MU) Actual Power
Tariff on Truing -up
Distribution Purchase (MU)
(Rs./kWh) (Rs. Crore)
Losses
DVVNL 13,148.05 28.00% 18,260.56 4.284 7,823.65
MVVNL 10,710.70 23.00% 13,910.39 4.284 5,959.84
PVVNL 18,536.64 23.00% 24,073.59 4.284 10,314.22
PuVVNL 12,742.52 22.00% 16,336.08 4.284 6,999.12
KESCO 2,458.09 23.00% 3,192.33 4.284 1,367.74
Total power cost payable to UPPCL in its true-up petitions for future years 32,464.56
c. Petitioner should submit the actual Distribution losses and Sales at UPPCL level for FY 2013-14.
Licensee's Response
The Petitioner humbly submits that the actual distribution losses and sales at UPPCL level has
already been submitted before the Hon'ble Commission forming part of the True-up Petition. The
Petitioner in table 2-2 of the True-up petition for FY 2013-14 has clearly mentioned the total power
purchase, total units sold to discosms and total distribution losses at UPPCL level. The same is been
reproduced for the kind reference of the Hon'ble commission:
[ Particulars--------·- ·~-·---------4---u_n~_t __ ,. Approved ---~~
_i_ __
I
Power Purchase Input at State Level ~- MU ~ 4,632.oo 84,251.~~--J
I
! Transmissi~n Loss I MU i 4,451.00 I 6,665.72
j %- 1 5~26% , i
frransmission L~ss 7.91%
I I
i
Energy available at Discom End MU 80,181.00 77,586.12 ;
L _l .-----1
The above figures are as per the Balance Sheet of UPPCL for FY 2013-14 and can be verified from
notes to accounts forming annexure to the Balance Sheet. The audited accounts for FY 2013-14 of
UPPCL along with the supplementary audit report of CAG and provisional accounts for FY 2014-15
are hereby annexed marked as "Annexure-1".
Deficiency Note on DVVNL's Petition for Truing-up of FY 2013-14 and ARR/Tarifff or FY 2016-17
d. As regard the detailed analysis of the losses, the Petitioner should submit the Circle wise AT&C
Losses_f or last six years as per the enclosed Annexure -1 Circle wise losses, thereby grossing
them up to Discom level. Thus, the Petitioner should submit the same in the format as specified
by the Commission, for the proceedings in the matter of ARR'/ Tariff for FY 2016-17.
Licensee's Response:
It is humbly submitted that the circle wise AT&C losses, are not maintained at the circle level in the
particular format issued by the Hon'ble Commission. However the circle wise AT&C losses for FY
2013-14, 2014-15 and 2015-16 (upto November) are enclosed herewith marked as "Annexure-2"
e. The Petitioner should submit the detailed break-up the energy procured from short term
sources and unscheduled interchange (UI) along with the power purchase rates for FY 2013-14.
In case the Petitioner is not able to submit the above data, the Commission may disallow the
related Power Purchase Cost.
Licensee's Response:
The detailed break-up of the energy procured from short term sources and unscheduled interchange
(UI) along with the power purchase rates is hereby annexed marked as "Annexure-3".
f. As regard to the Inter State and Intra State Transmission Losses for FY 2013-14 the Petitioner
has claimed transmission losses at consolidated level as 5.26% against the actual loss of 7.91%.
In this regard, the Petitioner should submit the breakup of Inter-State transmission losses and
Intra-State transmission loss (claimed in Petition as well as actual) for FY 2013-14. The Petitioner
should also submit reason for such a rise in actual loss level for FY 2013-14 over the past years.
Licensee's Response
The Petitioner humbly submits that the details of the Intra-State transmission losses for FY 2013-14
are provided in the table below:
Particular FY 14
Inter-State transmission losses(%) 3.97%
Intra-State transmission losses(%) 4.10%
Further in regard with the Commission's query reason for such a rise in actual loss level for FY 2013-
14, the Petitioner humbly submits that the same is due to increase in Inter-State transmission
losses. The actual Inter-State transmission losses for FY 2012-13 were 1.17%, against which the
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Deficiency Note on DVVNL's Petition for Truing-up of FY 2013-14 and ARR/Tariff for FY 2016-17
losses for FY 2013-14 have been recorded at 3.97%. The actual Intra-State transmission losses for FY
2012-13 were 4.08%, against which the losses for FY 2013-14 have been recorded at 4.10%.
In this regard Petitioner further requests the Hon'ble Commission to kindly approve the
additional power purchase quantum while approving the revised Bulk Supply Tariff, due to
increase in Inter-State transmission losses, as the same is beyond the control of the Petitioner.
True-up
Particulars Unit Approved Actuals
Petition
Power Purchase MU 84,632.00 84,251.84 83,871.72
Inter-State Transmission Losses MU 1,397.00 3,344.80 3,329.71
Inter-State Transmission Losses % 1.65% 3.97% 3.97%
Intra-State Transmission Losses MU 3,054.00 3,320.92 80,542.01
Intra-State Transmission Losses % 3.67% 4.10% 3.67%
Energy available at Discom End MU 80,181.00 77,586.12 77,586.12
Power Purchase Cost (including PGCIL charges) Rs Crore 31,456.00 33,233.64 33,083.70
Power Purchase Cost per unit Rs/kWh 3.72 3.94 3.94
O&M Expenses of UPPCL Rs Crore 157.71
Allowable Power Purchase Cost at Discom end Rs Crore 33,241.40
Power Purchase Cost per unit at Discom end (BST) Rs/kWh 4.284
g. The Petitioner in its Petition has submitted the Power Purchase Cost (including PGCIL charges)
(Table 2-2 of Petition) and not submitted the bifurcated details of power purchase cost and
PGCIL charges. In this regard, the Petitioner should submit the segregated details of PGCIL
charges and power purchase cost for FY 2013-14.
Licensee's Response
As desired the breakup of PGCIL charges and power purchase cost for FY 2013-14 is detailed as
below:
Pax9£~1!'rs J'\J!l«t'!!Jf(l{$. C1·01;,_e)
Power Purchase Cost 31,956.62
PGCIL Charges 1,277.02
Total Power Purchase Cost incurred at UPPCL Level 33,233.64
The above figures are as per the audited balance sheet (Note-21) of UPPCL for FY 2013-14.
Deficiency Note on DVVNL's Petition for Truing-up of FY 2013-14 and ARR/Tariff for FY 2016-17
h. The Petitioner should submit source wise actual power purchase quantum and power purchase
cost (with break up for fixed charges, energy charges and other charges for FY 2013-14 at UPPCL
level.
Licensee's Response:
The Petitioner hereby submits that source wise actual power purchase quantum and power
purchase cost (with break up for fixed charges, energy charges and other charges for FY 2013-14 at
UPPCL level has already been submitted with the Hon'ble Commission at the time of submitting the
data gap replies in respect with the ARR Petition for 2015-16. However the petitioner hereby re
submits the same for kind consideration of the Hon'ble Commission. The details are hereby annexed
marked as "Annexure-4".
4. O&M Expense
a. Petitioner in its True up Petition for FY 2013-14 have claimed the actual O&M Expenses as per
the audited accounts. Petitioner should also submit the normative O&M Expenses as per the
Regulation 4.3 of the Distribution Tariff Regulations, 2006.
Licensee's Response
The normative O&M Expenses as per the Regulation 4.3 of the Distribution Tariff Regulations, 2006
is been calculated considering the following methodology, which has also been considered by the
Hon'ble Commission in its previous True-up Orders:
• The inflation index for FY 2013-14 is calculated based on the weighted average index of WPI
and CPI
• The normative O&M expenses for FY 2012-13 as approved by the Hon'ble Commission in its
previous True-up Order have been escalated using the inflation index of FY 2013-14 to arrive
at the normative O&M Expenses for FY 2013-14
• Further, in addition to the normative O&M expenses based on inflation, the Distribution
Tariff Regulations, 2006 provide for incremental O&M expenses at 2.5 % on addition to
asset during the previous year
FY 2012·13 I
FY 2013-14
(Normative as per FY 2013-14
Particulars (True-Up
True-up Order (Normative)
Petition)
dtd 18~06.2QJ,S) I
Employee Expenses
Employee Cost and Provisions 331.92 272.37 3~ltE}6t ,~··
e1 --- (\ ~na It
~
Deficiency Note on DVVNL's Petition for Truing-up of FY 2013-14 and ARR/Tarifff or FY 2016-17
FY 2012-13 I
FY 2013-14
(Normative as per FY 2013-14
Particulars (True-Up
True-up Order (Normative)
I
Petition)
dtd 18,()6.2Q15)
Incremental Employee Expenses @ 2.5% 5.05
Gross Employee Expenses 331.92 272.37 362.50
Expenses Capitalised 67.22 102.09 102.09
Net Employee Expenses 264.70 170.28 260.41
A&G Expenses
Adm in & Gen Expenses 52.21 79.35 56.23
Incremental Admin & Gen Expenses @
0.79
2.5%
Gross Admin & Gen Expenses 52.21 79.35 57.02
Expenses Capitalised 20.64 29.20 29.20
Net Admin & Gen Expenses 31.57 50.15 27.82
R&M Expenses
Repair & Maintenance Expenditure 187.52 329.62 201.95
Incremental R&M Expenses @ 2.5% 2.85
Gross Repair & Maintenance Expenses 187.52 329.62 204.80
Gross O&M Expenses 571.65 681.34 624.32
Expenses Capitalised 87.87 131.29 131.29
Net O&M Expenses 483.78 550.05 493.03
b. The Petitioner should also compute the efficiency gain (if any) based on the normative O&M
Expenses of FY 2013-14, as per the Distribution Tariff Regulations, 2006 and the approach
adopted by the Commission in its earlier Tariff Orders.
licensee's Response
The efficiency gain based on the approach adopted by the Commission is provided as per the table
below:
FY 2013-14 FY 2013-14
FY 2013-14
Particulars (As per Order (True-Up
(Normative)
dtd 31.05.2013) Petition)
Gross O&M Expenses 610.18 681.34 624.32
Expenses Capitalised 61.61 131.29 131.29
Net O&M Expenses 548.58 550.05 493.03
Efficiency Gains (50%} 27.77
Deficiency Note on DVVNL's Petition for Truing-up of FY 2013-14 and ARR/Tariff for FY 2016-17
c. As regards the O&M expenses the Petitioner should clarify whether the CGRF expenses have
been included in O&M expenses claimed for FY 2013-14. Petitioner should submit the details of
CGRF expenses separately for FY 2013-14.
Licensee's Response
The CGRF expenses are part of the O&M expenses being claimed by the licensee. Currently such
expenses are not separately accounted for. Hence the details of such expenses are not available
with the licensee. However, it is prayed that the Hon'ble Commission may allow an adhoc allowance
towards the CGRF expenses considering the remuneration norms and associated costs in the CGRF
framework approved by the Hon'ble Commission.
5. Capital Investment
a. Petitioner in its True-up Petition has claimed the GFA addition as Rs. 960.95 Crore for FY 2013-
14. However, the Petitioner has not submitted the source of funding of such capitalisation.
Petitioner should submit the detailed source-wise funding of the above mentioned GFA
addition for FY 2013-14.
Licensee's Response
It is stated that the Hon'ble Commission in the true up order for FY 2012-13 and ARR order for FY
2015-16 had considered a normative tariff approach wherein it had considered a normative gearing
of 70:30.
Considering this approach, 70% of the capital expenditure undertaken in any year was considered to
be financed through loan and balance 30% has been considered to be financed through equity
contributions. The portion of capital expenditure financed through consumer contributions, capital
subsidies and grants was separated as the depreciation and interest thereon would not be charged
to the consumers.
The licensee is agreeable to this normative approach approved by the Hon'ble Commission. No
deviation in this approach has been sought by the licensee. The licensee has prepared the true up
petition for FY 2013-14 based on this normative approach approved by the Hon'ble Commission.
b. Petitioner has submitted that it has considered the interest rate of 11.92 % for computing the
interest expenses for FY 2013-14 which is as per the weighted average interest rate of the
licensee as per audited accounts. However, the computation of the same has not been